Retail exposed to changing shopping habits: Karabus Management predictions
for who will survive

TORONTO, Oct. 13 /CNW/ - Today's new retail reality has transformed the traditional relationship between consumers and retailers. According to Karabus Management, a leading retail advisory firm and subsidiary of PricewaterhouseCoopers (PwC) Canada, tightened budgets and the variety of shopping options available to consumers from traditional brick and mortar to online have forced retailers to re-examine their value proposition.

Antony Karabus, President and CEO of Karabus Management offers these predictions for the remainder of 2009 and into 2010:

    
    -  Luxury was the hardest hit in 2008, and while we see a modest recovery
       in that segment, it still has a long way to go.
    -  Value retailers will thrive.
    -  Emphasis on health and wellness will represent a strong trend. Expect
       continuing gains in organic and healthy alternatives.
    -  Diversity will also play a role in redefining retail. With growing
       ethnic diversification, expect to see retailers catering to the needs
       of first and second generation immigrants.
    -  Sales and margins will remain under pressure. Retailers will only
       spend money on store design and remodelling when absolutely required.
    -  Grocery store sales will remain stable.
    -  Premium casual restaurants will continue to do well through the
       remainder of 2009; however, as many consumers will elect not to
       patronize higher end restaurants, they will likely take a hit.
    

"Thriving retailers are not only managing their financial operations tightly; they are offering customers clear value, differentiating themselves through service, assortment and the in-store experience," says Mr. Karabus and provides these to five strategies for retailers to emerge stronger from the recession:

    
    -  Optimize cash and cost management.
    -  Understand what is relevant and motivates your customer.
    -  Use science to improve gross margins and inventory productivity.
    -  Invest in technology correctly and on the right projects.
    -  Get your supply chain right.
    

Karabus discussed these concepts in a presentation entitled, "Retail Strategies in the Context of a Cautious Consumer," at Scotia Capital's recent Annual Back to School Consumer Conference, which took place on September 22nd in Toronto. Karabus was the only non-retailer asked to participate in the conference. Other presenting companies included: Canadian Tire Corporation Limited, RONA Inc., Dorel Industries Inc., Susser Inc., Cineplex Galaxy Income Fund, Shoppers Drug Mart Corporation, Zellers, Loblaw Companies Limited, The Forzani Group, Empire Company Limited and Great Canadian Gaming Corporation.

About Karabus Management Inc.

Karabus Management Inc., a subsidiary of PricewaterhouseCoopers (PwC) Canada LLP, is a leading North American retail advisory firm that helps retailers significantly improve their operational and financial performance. The firm's more than 50 dedicated retail consultants work with many of North America's leading retailers. Karabus Management has worked extensively with numerous retailers to develop and execute turnaround and other business improvement plans in the face of challenging retail economic climates. For more information, please visit the company's website at www.karabus.com.

About PricewaterhouseCoopers LLP

PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 155,000 people in 153 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice. In Canada, PricewaterhouseCoopers LLP (www.pwc.com/ca) and its related entities have more than 5,200 partners and staff in offices across the country. "PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership, or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity.

SOURCE PwC

For further information: For further information: Carolyn Forest, (416) 814-5730, carolyn.forest@ca.pwc.com

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